A day after Novartis gapped higher, the bulls are looking for
the Swiss drug maker to surge to new highs.
optionMONSTER's Heat Seeker tracking system detected the purchase
of about 13,000 April 60 calls for $1.85 and the sale of 13,000
April 50 puts for $1.05. Total option volume in the stock is more
than 14 times greater than average so far today.
NVS is down 0.25 percent to $58.84 in late morning trading.
Yesterday it leapt 6 percent after finalizing a deal to buy
eye-care company Alcon and announcing it would resume a $10.3
billion stock buyback.
Today's option trade cost $0.80 and will resemble a long position
in the stock, but with relatively little downside risk: It will
generate profit if NVS rallies over $60 and not lose any money
unless the stock falls below $50.
NVS has been trapped below $60 since late 2006. If it breaks that
level, investors may expect a prolonged rally.
(Chart courtesy of tradeMONSTER)
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